When you’re looking to start a company or you enter a period of strong growth, you’re likely going to need project funding. Fortunately, you have a few options to secure an influx of cash for your business.
First, there is bank financing. This may be a good option for small expenses or capital purchases, especially if you already have a relationship with a local business banker.
If you have partners, the second option is to ask them to kick in a certain amount commensurate with their level of company ownership.
These options may not give you the flexibility you need in order to make the choices that enable you to launch or grow, however. A private investment firm may be a better bet. Not only will you get the needed project financing, you will also have access to professionals with expertise in growing businesses through an influx of capital. For example, if you plan to purchase property to build a new hotel, you’ll benefit from a firm that has experience providing hospitality project funding. Your partners may not have the knowledge needed to help your company be successful in this endeavor.
When you’re ready to seek private funding for your business, you’ll need to be fully prepared. Create a solid business plan that shows the market for your business opportunity and includes a potential plan for repayment of the investment. Be prepared to show the potential risks and benefits not only for your business but also for your potential investors.
In the case of a building project such as a hotel, ensure that you’ve planned for all local requirements and any environmental impact studies that need to be done. Your potential investors will need to know that you’re prepared for anything that might come your way before they can provide financing.